Car dealer refuses to refund £500 deposit...
Discussion
JustinP1 said:
Yes, I can see a judge awarding the above. Judges decide cases by using the law. They are there to enforce contracts freely entered into. They are not there to let a party out of a 'bad bargain' or a breach of contract causing another party a loss simply because they changed their mind.
Can you point me towards the 'Only one day though, Guv' contract breaching loophole that you allude is out there?
Are you suggesting after you exchange contracts and buy a house that when you arrive if the wife doesn't like it you can just pack up and send the removal vans back and take back your home again?
Next time I hear of someone getting gazumped, will they be able to make a claim..?!Can you point me towards the 'Only one day though, Guv' contract breaching loophole that you allude is out there?
Are you suggesting after you exchange contracts and buy a house that when you arrive if the wife doesn't like it you can just pack up and send the removal vans back and take back your home again?
Edited by JustinP1 on Monday 1st June 23:33
Dealer needs to refund minus 100 quid for messing him about, everyone's happy. But greediness rules some decisions made, hope the op gets his cash back, to many dealers play the same hand IMO.
e8_pack said:
Next time I hear of someone getting gazumped, will they be able to make a claim..?!
Dealer needs to refund minus 100 quid for messing him about, everyone's happy. But greediness rules some decisions made, hope the op gets his cash back, to many dealers play the same hand IMO.
Completely different circumstances, as gazumping is done before the contract is effectively exchanged/signed, not the same example at all.Dealer needs to refund minus 100 quid for messing him about, everyone's happy. But greediness rules some decisions made, hope the op gets his cash back, to many dealers play the same hand IMO.
The only person happy here is the OP, not the dealer, so hardly everyone.
johnfm said:
Interesting treatment re: repudiation. I'd check what Chitty has to say re: status of the £500 vis a vis a pst obligation.
I've got to admit, you did make me check. Chitty deals with deposits and the possibility of their return at paras 26-193 to 26-201 (31st). In summary, it says:"modern English courts do not appear to apply the penalty rules to deposits or clauses providing for the forfeiture of sums paid"
Feel free to have a read if you have access, it's quite an interesting area actually; more than I thought. There have been Privy Council cases where a buyer in breach was able to recover his deposit, but those do not bind here, of course. The principle of the repayment of a deposit where it would be unconscionable for the seller to keep it has also been approved in England, but in the case that decided it, it was not considered unconscionable for the seller to retain £4,750 out of the £11,000 price in one contract, and £3,500 out of the £11,000 price on another (but in that case the buyer had already received some benefit).
In any case though, the dissenting view in that case is the one that's been followed since. That is that there should be no relief in the absence of fraud, sharp practice or unconscionable conduct on the part of the seller. Which I see no evidence of here!
johnfm said:
Pretty good analysis - apart from the LDs. Para 5 of the T&Cs suggest the dealer could retain 'any deposit paid'. Way too vague to be a genuine pre-estimate of loss.
I did say that I thought it very unlikely that a court would get as far as trying to apply the relevant tests. I was mainly trying to illustrate that the theme of 'if he sells it for a few quid less, keeping the £500 is definitely a penalty and definitely unenforceable' was not correct. e8_pack said:
Next time I hear of someone getting gazumped, will they be able to make a claim..?!
No, because there is no contract for sale of land until exchange. Contracts for sale of land can't be formed orally, so the contract only comes into existence at exchange. Gazumping happens before exchange. If it did happen after that then there would be remedies available.belly2002 said:
No, because there is no contract for sale of land until exchange. Contracts for sale of land can't be formed orally, so the contract only comes into existence at exchange. Gazumping happens before exchange. If it did happen after that then there would be remedies available.
And with property sales, I think if you pull out after exchange you're liable for 10% of purchase price regardless of deposit size or vendors actual loss. Is that right? Lucky the OP isn't buying a house...JustinP1 said:
OP, there's a lot of well meaning, but misguided advice on here.
Apart from this, which is IMHO spot on.
You freely entered into a contract which you breached.
Worst case scenario here is that 3 months later, the dealer sells the car for £23k. Technically, you've lost your £500 and you could be asked for an additional £3500.
If I were you, I'd seriously consider offering my deposit plus £1 in full and final settlement to protect myself from the above.
Am I right in thinking that the dealer could, at least in theory, add to this claim any additional costs incurred, So for example: Apart from this, which is IMHO spot on.
You freely entered into a contract which you breached.
Worst case scenario here is that 3 months later, the dealer sells the car for £23k. Technically, you've lost your £500 and you could be asked for an additional £3500.
If I were you, I'd seriously consider offering my deposit plus £1 in full and final settlement to protect myself from the above.
- re advertising the car (ok thats small money)
- if he has room for say 10 cars on his forecourt, one of those is now blocked by this car, so has effectively prevented him from marketing an additional car.
- he also has £20+k less cash to play with so there could be overdraft charges, or the inability to buy new stock?
I ask because I'm interested to understand, rather than I think its likely to happen here.
Edited by balls-out on Tuesday 2nd June 09:48
belly2002 said:
... it's quite an interesting area actually; more than I thought.
I always remember a salesman from one of the big, public company, dealer groups saying elsewhere that they were made life difficult if someone wanted to cancel but their big-shot corporate legal opinion was that if push came to shove they couldn't with-hold deposits. And, IIRC, that was related to a new car discussion, which you would think would be more awkward for the dealer.balls-out said:
JustinP1 said:
OP, there's a lot of well meaning, but misguided advice on here.
Apart from this, which is IMHO spot on.
You freely entered into a contract which you breached.
Worst case scenario here is that 3 months later, the dealer sells the car for £23k. Technically, you've lost your £500 and you could be asked for an additional £3500.
If I were you, I'd seriously consider offering my deposit plus £1 in full and final settlement to protect myself from the above.
Am I right in thinking that the dealer could, at least in theory, add to this claim any additional costs incurred, So for example: Apart from this, which is IMHO spot on.
You freely entered into a contract which you breached.
Worst case scenario here is that 3 months later, the dealer sells the car for £23k. Technically, you've lost your £500 and you could be asked for an additional £3500.
If I were you, I'd seriously consider offering my deposit plus £1 in full and final settlement to protect myself from the above.
- re advertising the car (ok thats small money)
- if he has room for say 10 cars on his forecourt, one of those is now blocked by this car, so has effectively prevented him from marketing an additional car.
- he also has £20+k less cash to play with so there could be overdraft charges, or the inability to buy new stock?
I ask because I'm interested to understand, rather than I think its likely to happen here.
Edited by balls-out on Tuesday 2nd June 09:48
To give an example, a Judge may decide that the OP would have been aware that breaching would mean that the car may need to be re-prepped at a later date, readvertised and may be sold at a lower amount.
The other examples you give could almost be a contract law test example....
It might be interpreted that a financing charge on a large sum invested in the car be foreseeable, but the fact that the dealer could not market other cars or buy new stock be too remote. JustinP1 said:
Generally, the losses are limited to those which could have been reasonably foreseen by the party if they were to breach at the point that the contract was formed. There is also a limit of remoteness.
To give an example, a Judge may decide that the OP would have been aware that breaching would mean that the car may need to be re-prepped at a later date, readvertised and may be sold at a lower amount.
The other examples you give could almost be a contract law test example.... It might be interpreted that a financing charge on a large sum invested in the car be foreseeable, but the fact that the dealer could not market other cars or buy new stock be too remote.
Cheers for that - I find this area fascinating. To give an example, a Judge may decide that the OP would have been aware that breaching would mean that the car may need to be re-prepped at a later date, readvertised and may be sold at a lower amount.
The other examples you give could almost be a contract law test example....
It might be interpreted that a financing charge on a large sum invested in the car be foreseeable, but the fact that the dealer could not market other cars or buy new stock be too remote. The assertions that are made here a source of considerable entertainment on a number of often diverse criteria
e8_pack said:
What's is most evident is how a solicitors involvement can quickly escalate any costs. Although this would be small claims and not require such, even a small issue as this takes some legal wrangling to get to a decision.
Yes. IMHO, often the fault is in the drafting of the contract. A well drafted contract does not leave grey areas for wrangling.That, to a certain extent is the case here. A dealer, which I presume turns over six or seven figures every year is using a 'stock' set of terms that they've bought from somewhere that are 15 years old.
This is a very good example of where any possible wrangling could be avoided. The dealer could/should have done either one of two things, both of which would have meant that there is little room for discussion on the outcome here:
1) Outline in the contract that should the buyer not collect/pay for the remainder of the vehicle, that the car will be resold and the buyer is responsible for losses X, Y and Z.
2) Alternatively, outline in the contract that the 'Deposit' is set at an amount that is a pre-estimate of the losses involved should the above happen.
JustinP1 said:
Yes. IMHO, often the fault is in the drafting of the contract. A well drafted contract does not leave grey areas for wrangling.
That, to a certain extent is the case here. A dealer, which I presume turns over six or seven figures every year is using a 'stock' set of terms that they've bought from somewhere that are 15 years old.
This is a very good example of where any possible wrangling could be avoided. The dealer could/should have done either one of two things, both of which would have meant that there is little room for discussion on the outcome here:
1) Outline in the contract that should the buyer not collect/pay for the remainder of the vehicle, that the car will be resold and the buyer is responsible for losses X, Y and Z.
2) Alternatively, outline in the contract that the 'Deposit' is set at an amount that is a pre-estimate of the losses involved should the above happen.
Re 1). Would he not have to be able to prove that X, Y or Z had actually happened? Bearing in mind that there was only one day between deposit paid and cancellation.That, to a certain extent is the case here. A dealer, which I presume turns over six or seven figures every year is using a 'stock' set of terms that they've bought from somewhere that are 15 years old.
This is a very good example of where any possible wrangling could be avoided. The dealer could/should have done either one of two things, both of which would have meant that there is little room for discussion on the outcome here:
1) Outline in the contract that should the buyer not collect/pay for the remainder of the vehicle, that the car will be resold and the buyer is responsible for losses X, Y and Z.
2) Alternatively, outline in the contract that the 'Deposit' is set at an amount that is a pre-estimate of the losses involved should the above happen.
Re 2). Would he not have to prove that the losses happened?
I like the idea of the clauses and it would make negotiations about reimbursement clearer to ALL concerned.
Something like...
1) The deposit paid is used for the following
a) Cost of removing the car from advertising £100
b) Cost of preparation, including valeting £100
c) etc.
ALL parties can see if a), b), etc have been done and it would be clear that if the car is no longer for sale (for example) that at least £100 of the deposit has gone.
Hope that you can all see where I'm coming from
.
pingu393 said:
JustinP1 said:
Yes. IMHO, often the fault is in the drafting of the contract. A well drafted contract does not leave grey areas for wrangling.
That, to a certain extent is the case here. A dealer, which I presume turns over six or seven figures every year is using a 'stock' set of terms that they've bought from somewhere that are 15 years old.
This is a very good example of where any possible wrangling could be avoided. The dealer could/should have done either one of two things, both of which would have meant that there is little room for discussion on the outcome here:
1) Outline in the contract that should the buyer not collect/pay for the remainder of the vehicle, that the car will be resold and the buyer is responsible for losses X, Y and Z.
2) Alternatively, outline in the contract that the 'Deposit' is set at an amount that is a pre-estimate of the losses involved should the above happen.
Re 1). Would he not have to be able to prove that X, Y or Z had actually happened? Bearing in mind that there was only one day between deposit paid and cancellation.That, to a certain extent is the case here. A dealer, which I presume turns over six or seven figures every year is using a 'stock' set of terms that they've bought from somewhere that are 15 years old.
This is a very good example of where any possible wrangling could be avoided. The dealer could/should have done either one of two things, both of which would have meant that there is little room for discussion on the outcome here:
1) Outline in the contract that should the buyer not collect/pay for the remainder of the vehicle, that the car will be resold and the buyer is responsible for losses X, Y and Z.
2) Alternatively, outline in the contract that the 'Deposit' is set at an amount that is a pre-estimate of the losses involved should the above happen.
Re 2). Would he not have to prove that the losses happened?
I like the idea of the clauses and it would make negotiations about reimbursement clearer to ALL concerned.
Something like...
1) The deposit paid is used for the following
a) Cost of removing the car from advertising £100
b) Cost of preparation, including valeting £100
c) etc.
ALL parties can see if a), b), etc have been done and it would be clear that if the car is no longer for sale (for example) that at least £100 of the deposit has gone.
Hope that you can all see where I'm coming from
.In the way forward of 2) case law is such that as long as that figure is a 'genuine pre-estimate of loss' then that's perfectly legal. No proof of the actual loss is needed, however, if the amount was exorbitant then it is open to challenge. That party might then be challenged to show they calculated their pre-estimate.
This way forward is very common, it's called a liquidated damages clause. What it does is put a figure on the sum so both parties know where they stand, and there can be no (or little) argument later.
Durzel said:
Foppo said:
The O.P.is entitled to his money back in my opinion.
It seems pretty obvious at this stage bearing in mind some pretty illuminating posts from people in legal fields that he likely does not.Hence:
e8_pack said:
What's is most evident is how a solicitors involvement can quickly escalate any costs. Although this would be small claims and not require such, even a small issue as this takes some legal wrangling to get to a decision.
I once worked for a large main dealer of a prestigious brand, we had a customer who ordered an expensive used vehicle, paid a deposit and signed an order form, on it was stated a date of delivery, which we salesmen were always directed to fill out as without it the order couldn't be enforced, if I remember correctly. He then thought better of it and tried to cancel, his request was refused, the vehicle was made ready, put on the back of a transporter and delivered to the man's address on the delivery date stated on the order form. Of course he wasn't there so the company threatened to sue him as they had fulfilled there part of the contract, a compromise was made where by he bought another car which he decided was more suited to his requirements. Sounds like the OP should hope that this doesn't happen to him.
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